During times of uncertainty such as these, business owners look to their investment advi-sors for guidance, comfort and security. And this presents advisors with a golden opportunity to build books consisting of business-owner clients, says Shelley Nesbitt, vice president of the Shelley and Drew Nesbitt Group, which operates under the RBC Dominion Securities Inc. banner.

“When there’s fear, clients want to make sure their affairs are in order,” Nesbitt told the audience at the 2009 Top Advisor Summit held in Toronto in April. “The business-owner market is huge. You can pick your sector and you can pick your size.”

The key to landing business-owner clients, however, is to be able to offer them a robust advisory service geared toward the needs of entrepreneurs. To do that, Nesbitt says, it’s important to understand what makes business owners tick, what their priorities are and what services and advice they’ll require now and in the future.

Most investment advisors focus on money management when talking to business owners, says Nesbitt, who specializes in business-owner clients. “It’s an important topic,” she notes, “but it represents a very small part of what they need to do on a day-to-day basis.”

Business owners also require insurance planning, succession planning, transition planning for when they make an acquisition or a divestiture, estate planning and retirement planning — in addition to traditional money management.

You should make it clear to a prospective business-owner client that you have the resources — either via your firm or through third-party suppliers — to help the prospect address his or her needs, Nesbitt says, and ultimately, increase the value of his or her business.

In Nesbitt’s experience, she has found that business owners are consumed by three issues. The first issue is the current and future value of their businesses, and how to maximize both. The second is family — a majority of business decisions are based on emotional or “soft” issues, Nesbitt says, and family is almost always at the centre of those emotional issues. And the third issue is the business owner’s eventual exit strategy.

“There are only three ways for business owners to exit,” Nesbitt says. “Sell their businesses, transfer their businesses down to a family member or do nothing and stay.”

The first option — selling the business — represents the most likely way to maximize value in the business. Transferring the business to a family member may be trickier and may require balancing a number of financial and family concerns. The third option — no exit planning — is almost always the worst one, and most likely to result in the business losing value.

Once an exit strategy is determined, the advisor can then discuss money management as well as insurance, succession, transition, estate and retirement planning for the client.

If you are to serve business owners, Nesbitt emphasizes the importance of understanding how business owners think and what they value.

“You have to understand their psyches,” she says. “I can assure you it’s one of the biggest things you need to take into consideration.”

Business owners are Type A personalities. They are leaders, not followers, and expect to be in control — particularly of their business affairs. They are also adamantly independent. They tend to plan ahead and have a vision of how their businesses will grow in one, three or five years. And they always remain, at their core, entrepreneurs.

Because of these traits, business owners set high standards for their advisors; they expect accuracy and attention to detail, Nesbitt says. And, as business owners’ time is at a premium, they disdain any “fluff” in the advisory service they get. “If you can appreciate their traits and understand their sensitivities,” she says, “it will go a very long way.”

So, how do you find business-owner clients? The first step, Nesbitt suggests, is to pick two or three industries in which you feel comfortable or are interested. Then learn everything you can about these industries by joining associations, subscribing to industry magazines and talking with people in those industries.

“Become familiar with the challenges these business owners have in their industries,” she says, “and think of ways to help them.”

Knowing an industry well will impress potential clients. “It gives them a sense that you have actually taken an interest,” Nesbitt says. “And it will give you confidence when looking for that business.”

@page_break@Once you’ve become familiar with an industry and the people in it, arrange small workshops or seminars that touch on the issues faced in that industry, and bring in experts to speak.

Nesbitt works with business owners in the distribution business, who often face currency concerns. She has set up seminars featuring experts in currency exchange.

IE